We finished pulling seven cloud apps, including HEY, out of AWS and onto our own hardware last summer. But it took until the end of that year for all the long-term contract commitments to end, so 2024 has been the first clean year of savings, and we've been pleasantly surprised that they've been even better than originally estimated.
For 2024, we've brought the cloud bill down from the original $3.2 million/year run rate to $1.3 million. That's a saving of almost two million dollars per year for our setup! The reason it's more than our original estimate of $7 million over five years is that we got away with putting all the new hardware into our existing data center racks and power limits.
The expenditure on all that new Dell hardware – about $700,000 in the end – was also entirely recouped during 2023 while the long-term commitments slowly rolled off. Think about that for a second. This is gear we expect to use for the next five, maybe even seven years! All paid off from savings accrued during the second half of 2023. Pretty sweet!
But it's about to get sweeter still. The remaining $1.3 million we still spend on cloud services is all from AWS S3. While all our former cloud compute and managed database/search services were on one-year committed contracts, our file storage has been locked into a four(!!)-year contract since 2021, which doesn't expire until next summer. So that's when we plan to be out.
We store almost 10 petabytes of data in S3 now. That includes a lot of super critical customer files, like for Basecamp and HEY, stored in duplicate via separate regions. We use a mixture of storage classes to get an optimized solution that weighs reliability, access, and cost. But it's still well over a million dollars to keep all this data there (and that's after the big long-term commitment discounts!).
When we move out next summer, we'll be moving to a dual-DC Pure Storage setup, with a combined 18 petabytes of capacity. This setup will cost about the same as a year's worth of AWS S3 for the initial hardware.
This brings our total projected savings from the combined cloud exit to well over ten million dollars over five years! While getting faster computers and much more storage.
Now, as with all things cloud vs on-prem, it's never fully apples-to-apples. If you're entirely in the cloud, and have no existing data center racks, you'll pay to rent those as well (but you'll probably be shocked at how cheap it is compared to the cloud!).
But it's still remarkable that we're able to reap savings of this magnitude from leaving the cloud. We've been out for just over a year now, and the team managing everything is still the same. There were no hidden dragons of additional workloads associated with the exit that required us to balloon the team, as some spectators speculated when we announced it
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